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Federal Reserve: College Education Worth $830,000 More Than High School Diploma

The Federal Reserve Board of San Francisco released a report today that sought to answer whether or not it is still worth going to college. The report's conclusion is, yes, going to college is still worth it.

The report said there is an $830,000 difference between getting a college education over just a high school diploma.

"Although other individual factors might affect the net value of a college education, earning a degree clearly remains a good investment for most young people. Moreover, once that investment is paid off, the extra income from the college earnings premium continues as a net gain to workers with a college degree. If we conservatively assume that the annual premium stays around $28,650, which is the premium 20 years after high school graduation for graduates in the 1990s–2000s, and accrues until the Social Security normal retirement age of 67, the college graduate would have made about $830,800 more than the high school graduate. These extra earnings can be spent, saved, or reinvested to pay for the college tuition of the graduate’s children."

"Although there are stories of people who skipped college and achieved financial success, for most Americans the path to higher future earnings involves a four-year college degree. We show that the value of a college degree remains high, and the average college graduate can recover the costs of attending in less than 20 years. Once the investment is paid for, it continues to pay dividends through the rest of the worker’s life, leaving college graduates with substantially higher lifetime earnings than their peers with a high school degree. These findings suggest that redoubling the efforts to make college more accessible would be time and money well spent."

Since this report, and others like it, are all based on averages and compared against something worse, the low wages associated with just a high school degree, such reports are misleading in my opinion. College isn't for everyone, but it is still a good investment for those who pay for college wisely and make the most of the college they attend. The job market is not great, so choose your career path wisely.

I help parents reduce the cost of college and pay for it as wisely as possible. With the cost of the most expensive colleges today now in excess of $65,000 per year, even…

I help parents reduce the cost of college and pay for it as wisely as possible. With the cost of the most expensive colleges today now in excess of $65,000 per year, even students from families with incomes over $200,000 can qualify for need-based aid. But it's often a combination of tax savings and financial aid that saves families the most money when paying for college. I am the CEO of Stratagee.com, a provider of college planning advice to families and college planning software and services for financial advisors. I have spent twenty two years pioneering this field, integrating expertise in college admissions, financial aid, tax aid and the family's personal resources into a best strategy.